CapitaLand's Q1 net profit jumps 77% to $386.8m

All 45 unsold units at the upmarket The Nassim condo were bought by United Overseas Bank chairman emeritus Wee Cho Yaw for $411.6 million in January. Developer CapitaLand avoided having to pay Qualifying Certificate penalties that would have hit $9.3 million if the 45 units were left unsold by August.ST PHOTO: ALPHONSUS CHERN

Surge mostly due to $160.9m gain from sale of 45 condo units

CapitaLand yesterday unveiled a 77.2 per cent surge in first-quarter net profit to $386.8 million - thanks in large part to a gain of $160.9 million from the sale of 45 units of The Nassim.

Portfolio gains of $17.7 million in the three months ended March 31 also helped the bottom line, mainly from the sale of a township project in China, the developer said.

Group revenue for the quarter edged up 0.4 per cent to $897.5 million on more handovers from its development projects in China and rental contribution from newly acquired properties.

The development projects which contributed to the revenue in China this quarter included One iPark in Shenzhen, Riverfront in Hangzhou, Vista Garden in Guangzhou and Summit Era in Ningbo.

Mr Wee Cho Yaw, chairman emeritus of United Overseas Bank, bought all 45 unsold units at the upmarket The Nassim condominium for $411.6 million in January. The deal saw Mr Wee reap a bulk sale discount of about 18 per cent, and CapitaLand avoided having to pay Qualifying Certificate penalties that would have hit $9.3 million if the 45 units were left unsold by August.

AT A GLANCE

REVENUE: $897.5 million (+0.4%)

NET PROFIT: $386.8 million (+77.2%)

Mr Lim Ming Yan, CapitaLand president and group chief executive, said the group will complete and commence operations of six more malls in China, India, Malaysia and Singapore, as well as the retail components of three Raffles City developments and Capital Square in China. Five of these 10 malls and retail components will open in the current second quarter of this year. It also expects to open about 2,600 serviced residence units this year.

CapitaLand has also obtained the Urban Redevelopment Authority's provisional permission for the proposed redevelopment of Golden Shoe Car Park into a Grade A office building, and is awaiting the Singapore Land Authority's assessment of how much it needs to pay for the potential enhancement in land use.

Mr Lim added: "Singapore and China continue to be our core markets, while we scale up in markets such as Vietnam. We made our first foray into the Vietnam commercial property market in January 2017 with the acquisition of a prime site in the Central Business District of Ho Chi Minh City to develop our first international Grade A office tower in Vietnam. We will be on a look out for opportunities to further diversify our business and potentially bring our Raffles City brand there."

CapitaLand has secured pre- leases for over 90 per cent of the retail components of its Raffles City projects in Changning, Hangzhou and Shenzhen, slated to open in the second quarter. It said this will add to steady leasing income generated from its four operating Raffles City projects. Raffles City Chongqing is also on track for completion in phases starting from next year.

"As more of our properties become operational, our recurring income will grow," said Mr Lim.

Quarterly earnings per share rose to 9.1 cents from 5.1 cents a year earlier. Net asset value per share was $4.16 as at March 31, up from $4.15 as at Dec 31 last year.

CapitaLand shares yesterday ended five cents higher at $3.72.

A version of this article appeared in the print edition of The Straits Times on April 27, 2017, with the headline 'CapitaLand's Q1 net profit jumps 77% to $386.8m'. Print Edition | Subscribe

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